July 2, 2018 / 1:31 AM / 4 months ago

UPDATE 1-Australia's Sigma Healthcare loses pharma contract to NZ's EBOS

(Adds details on rival EBOS Group’s contract win, share performance)

July 2 (Reuters) - Australian pharmacy operator Sigma Healthcare Ltd lost nearly half of its value on Monday after it failed to extend a supply contract with Chemist Warehouse, a pharmacy operator which dominates the “daigou” or Chinese buying agent market.

The loss of the contract forced Sigma to lower its fiscal 2018 underlying operating earnings guidance to about A$75 million ($55.5 million) from an earlier A$90 million, and to roughly halve it to a range of A$40-50 million in fiscal 2020.

Sigma shares fell more than 45 percent to their worst level in nearly seven years in morning trade, while the broader market was 0.3 percent higher.

Meanwhile, New Zealand’s EBOS Group Ltd soared to a record high after it snapped up the deal to distribute pharmaceutical products to over 400 Chemist Warehouse and My Chemist stores in Australia.

EBOS estimated sales from the contract would add about A$1 billion to revenue in the first year after the agreement.

Sigma would continue to supply Chemist Warehouse and My Chemist Group under existing terms till June 30, 2019, the company said in a statement.

EBOS said it expected to enter a five-year supply deal, effective from July 1, 2019. ($1 = 1.3524 Australian dollars) (Reporting by Devika Syamnath in Bengaluru; Editing by Stephen Coates)

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